The past decade has seen a tremendous growth in the use of the world-wide-web (WWW) for online purchases of products and services. In one respect, such products are available via web sites provided by e-commerce merchants, such as electronic retailers. Typically, payment of products purchased from e-commerce merchants are made by means of electronic credit-card transfers. In most instances, the final transaction price reflects a total price for the purchased goods, applicable taxes, and shipping costs to pay for delivery of goods to the buyer. Generally, e-commerce merchants will employ business accounts or the like with one or more shipping companies that facilitate delivery of the goods sold by that merchant. Some smaller merchants may employ shippers on an as-needed basis, paying cash at the point of service.
Another type of electronic purchase that has seen exponential growth is individual seller-to-buyer transactions, wherein neither the seller nor the buyer is a merchant. A common form of this type of transaction is the online auction, such as auctions facilitated by EBAY® corporation, Campbell, Calif. Third-party online auction hosts, such as EBAY®, provide a web-based platform that enables sellers to list and display items for sale, and buyers to bid on the items that are offered. Typically, upon expiration of the auction period or other auction-ending event, the user that has submitted the highest bid “wins” the auction, and thus becomes the buyer. Optionally, the auction can be terminated when a predetermined bid amount has been received by a user. At this point, both the seller and buyer are apprised of the result of the auction (typically via e-mail), which initiates the physical transfer of the goods to the buyer and payment from the buyer to the seller.
A typical transfer cycle proceeds as follows. First, a final price is determined that includes the shipping cost. This cost may be set in advance of the auction (i.e., one or more fixed prices listed in the auction for various shipping options), or may be determined on an actual shipping cost basis. In the latter instance, the seller must first determine the shipping costs prior to determining the final price. Depending on the shipping method, shipping price information can generally be obtained from shipping cost tables and the like. Several of the large shipping vendors (e.g., United Parcel Service (UPS), Federal Express, etc.) provide online estimators to assist with this process. After the final price is determined, the seller typically sends in e-mail to the buyer, identifying payment options (these may also be identified via the auction listing). In response, the buyer employs one of the payment options to pay for the item plus the shipping cost.
Oftentimes, the seller of the auctioned item is an individual, although online auctions are very popular for merchants as well. Most individuals do not have credit-card merchant accounts, so they cannot accept this form a payment. As such, the selected form a payment will generally be limited to a money order, cashier's check, or personal check. Another popular option in this case is to use a third-party payment service, such as PAYPAL®, Mountain View, Calif. In this instance, payment may be made electronically directly to the recipient's (seller's) payment service account (and hence to the seller's personal bank account listed with the payment service or to the seller via other forms of payment), either through use of a similar payment service account for the buyer, or via a credit card payment to the payment service.
Upon receipt and clearance of the payment, the seller will generally go to the selected shipping vendor and pay for the shipment via a cash transaction, since most individual on-line sellers do not have business accounts with shipping companies. This is very time-consuming, often resulting in a delay in the overall transaction process. For example, it may be inconvenient for the seller to go to a selected shipping vendor shortly after being notified that payment has been received for a given sales transaction. Furthermore, this places an extra burden on the seller. In fact, this can be such a burden that many potential auctions are never initiated, since the owners of lower-priced auctionable items consider the “personal” (i.e., non-monetary) cost of facilitating shipment of the items to be too great relative to the auction value of the items. For example, while a $10.00 item may only cost $3.00 to ship, it may not be worth it for a potential seller to spend 30 minutes or more in connection with shipping the item.